UPDATE 2-German steel body sees recovery only by 2011

* German steel group sees 2010 as very difficult yr as well

* Says steel cycle to normalise in 2011 at earliest

* Sees China becoming net steel exporter in Q4

(Adds further comments)

DUESSELDORF, Germany, Nov 9 (Reuters) - There will be no recovery for Germany's steel industry until at least 2011, following a "very difficult" 2010, the country's steel federation said on Monday.

"But the worst is behind us," Federation President Hans-Juergen Kerkhoff told reporters.

Kerkhoff said supply and demand in Germany, the biggest steel-making nation in Europe, had now "balanced out again" on a better level compared with early this year.

Third-quarter new orders were flat year on year, but the recovery was due to an end of destocking, he added.

"We expect a normalisation of the steel cycle in 2011 at the earliest," he added.

The world economy is still grappling with a slow recovery and traders warn that the few signs of a pick-up in recent weeks could largely be owed to bargain hunting, rather than signs of real demand.

A slew of results in October from European and U.S. steelmakers, including world No.1 ArcelorMittal (ISPA.AS) and U.S. Steel Corp (X.N), have dampened recovery hopes, indicating that demand is still languishing. [ID:nN27243732] [ID:nLQ682729]

Germany's ThyssenKrupp (TKAG.DE) reports fourth-quarter results on Nov. 27 and its smaller rival Salzgitter (SZGG.DE) issues third-quarter figures on Nov. 12. Shares in the two companies were up 1.9 and 2.3 percent respectively on Monday afternoon, outperforming Germany's blue-chip index .GDAXI which was 1.6 percent higher.

CHINA A RISK TO STEEL RECOVERY

Kerkhoff said that among risks to steel recovery worldwide were China's structural problems, and the country could again become a net exporter of steel in the fourth quarter, he added.

He did not rule out the possibility that European steelmakers would again ask the European Union -- as they did in 2007 -- to file anti-dumping suits against countries, such as China, if the latter resorted to "unfair" trading practices.